Archive for September, 2010

With the economy in its current state, people are trying to come up with new ways to generate capital for everyday expenses. Although it is possible for working individuals to do this, it can be difficult for the retired population. Fortunately, there are still a few ways retired people can gain capital and it is mainly through the equity in their homes that they can benefit.

Equity release programmes can provide retired homeowners with revenue from the value of their homes. These programmes are ideal for homeowners who are not interested in selling their homes and who want to stay there indefinitely. After weighing up the pros’s & con’s of moving & having decided that residing at the family home is to remain permanent, then equity release can be considered.

There are many other benefits offered by equity release

Equity release offers a lump sum that is free of income tax. It can also be utilised in reducing the amount of tax homeowners have to pay for their property. Providing any gift made to children or other beneficiary was made seven years prior to their death then this amount can become exempt from inheritance tax.

Equity release plan holders have the assurance that the interest rate taken at the outset, will remain exactly the same throughout the duration of the plan. Therefore assuming no further advances are taken, the future balance will be known for definate & one can budget for accordingly. If Bank of England interest rates do rise, the equity release interest rate remains unaffected.

All equity release schemes that are members of SHIP will also be protected by a no negative equity guarantee. This ensures that should the equity release scheme become more than the value of the home, then the equity release company can only receive the full market value of the house; any excess over & above will be written off under the no negative equity guarantee.

In addition to this, on the roll-up lifetime mortgage, the plan holders will always retain 100% ownership of the property. Therefore, any escalation in house price will be kept by the equity release plan holder, not the lender.

The capital gained through equity release, which is also known as an annuity, can be used as steady income. However, taking up an equity release programme will result in a lower inheritance for the family after the homeowner’s death. Due to this, it is important to consider this process carefully.

Many people think of retirement as a stage where they can spend their lives with comfort and ease. People work hard all through their life to save enough for their retirement. However, retirement is not always as financially lucrative as everyone expects it to be. With retirement regular income can reduce significantly, but expenses can continue to grow.

Many people dream of retirement finance within the family home & living with a regular monthly cash flow to take care of their expenses. After their retirement, people expect to spend maximum time with their family and other relatives. Can equity release help?

With the current fragile economic climate, many dreams remain unfulfilled. Inflation has increased the cost of living. Inflation increases the cost of utility bills and household expenses. While living expenses have gone up, income is generally a lot lower after retirement. This creates a lot of strain on finances.

How equity release can be helpful

People used to sell their homes in order to unlock the equity. With the new equity release schemes, the need for selling your home to gain financial returns can be eliminated. You can enjoy financial benefits from your property without necessarily selling it. You can use your property to get money in terms of cash without losing ownership & by releasing the equity that is tied up in the bricks & mortar. You can even receive the payments in the form of monthly instalments or as a lump sum.

Due to these advantages, equity release schemes are becoming quite popular among retired people & the future of this market seems set to rise a shouse prices are predicted to rise steadily over the longer term.

People who eventually retire from their work look forward to spending the rest of their lives comfortably. For these retired individuals, retirement should be a period of less worry & no work. In effect they will have more free time and can therefore concentrate on the happiness of seeing their family grow up.

However, unless there has been many years of retiremnent planning, these dreams of a relaxing & an enjoyable retirement can suddenly turn sour.

With more time to spend money, retirement is also known as the ‘longest holiday of your life‘. You will be aware that holiday periods are probably the most expensive periods of life & are usually planned for a year in advance. Therefore, consider the holiday you will be entering, once you retire & the lengthy duration thereof.

The average person will retire between 60-65. Life expectancies are now reaching into the late 80’s; therefore planning for this period should be all relative.

So, considering most people are not as disciplined at planning for their retirement as they are with their annual holidays, how can one rectify this issue once retirement is reached & they have insufficient provision to live on?

Well one of the solutions to this could be via equity release schemes which can provide a way to gain cash benefits without having to sell off the property.

Making use of the increase in realty prices
Real estate prices have increased significantly over the past few decades. By optimising these increases & climbing onto the property ladder, can pay dividends in the long run for your retirement

In the forthcoming years, house prices should begin to rise again. In such a scenario, the home owner can further capitalise on the equity locked inside the house without having to sell the property. Having a constant income flow can ensure that the retired population can lead a high quality of life, even when their regular income has fallen sharply.

How can equity release help?

By continuing to maintain a rung on the property ladder, once retirement age is attained then it can be time to cash in on the equity built in the property during one’s period of employment. There are several ways of achieving this if a top-up to the state pesnion is required. Whether you are in need of income or a capital lump sum, equity release schemes can assist assuming certain criteria is met; a property value over £70,000 & a minimum age of 55. Therefore, even if early retirement has been taken for health or unemployment reasons there can still be financial help available with equity release.

Distinguishing features of equity release schemes
One of the main features of an equity release scheme is that the homeowner can retain 100% ownership of the home and at the same time can continue taking income or capital from the higher value of their home. The money which is released can be paid back to the equity release company at anytime in the future (subject to possible early repayment charges).

However, this is usually on the death of the property owner or them moving into long term care. Equity release is particularly beneficial to those who do not have family members to look after and do not need to pass on their property to the next generation.

The benefits of equity release schemes are many. Firstly the cash amount that is received by the owner of the house is exempt from income tax. Thus, the retired individual can continue taking equity from the property in order to supplement their lifestyle & thus make it the best holiday of their lives!

For further information on equity release & the current equity release schemes in the market, contact the equity release team on 0800 678 5159.

Equity release schemes are beneficial to those who own a property but are deprived of a regular source of income or capital requirements. You can get attractive cash benefits without losing the ownership of your home.

There are different types of equity release schemes available on the market. All are designed to suit different needs. You should receive advice from an independent adviser such as Equity Release Supermarket. They can source the market to find the best deal for your situation & at the same obtain exclusive deals obtained from the array of equity release providers.

With average house prices in the UK being around £167,423, there is large amount of equity that can be utilised to supplement one’s retirement. This average also differs according to the location of the property.

The average cost of London property is currently £413,350 & is over three times more expensive than the average cost of a North Lincolnshire property, which is current the countries lowest at £124,921.

These figures are useful in establishing how much equity could potentially be released around the country. With an equity release scheme, you can use this equity to help improve or maintain your standard of living. There are various other benefits of equity release schemes.

High end purchases

Equity release schemes are not just beneficial to those with reduced retirement income. People who have access to a reasonable pension yet want to make a high end purchase can also benefit from equity release schemes. They may not have access to credit and other options but equity release schemes can fulfil their dreams.

No need to sell property

A major advantage of going for equity release schemes is that the owner is not required to sell their home to get the funds. Most people do not want to compromise their standard of living. The cost of moving into a new home is also high. Consideration should be given to this option as downsizing could be an alternative to equity release. However the costs involved & the stress of moving in retirement can be a severe experience for this age group.

The costs involved would be estate agents fees, Stamp duty, removal costs, solicitors fees etc. There could also be costs once you have moved into the property, such as home improvements including decorating & getting the home to a desirable condition.

Hopefully this has given some food for thought as to soem of the issues surrounding equity release. If you wish to discuss these in more detail please contact Mark at Equity Release Supermarket on 0800 678 5159 or email mark@equityreleasesupermarket.co.uk

If you are retired then you will be aware about the implications involved within the pensions industry. Confusion surrounds the current funding of company pension schemes & the size of the shortfalls that exist within them. The knock effect of this has been the lack of saving towards one’s retirement.

This is becoming more evident with today’s retired population having minimal savings for their retirement years. The financial implications of this are that people are struggling financially in retirement meeting everyday expenses & those ‘one off’ costs that unexpectedly arise.

Many retired people face various financial challenges when their earnings cease. If you cannot manage with a minimum pension and limited savings then equity release could be an ideal option for you.

Insurance companies & annuity providers today make up the current crop of equity release companies that provide equity release schemes to old aged homeowners. Home reversion plans and lifetime mortgages are the two popular equity release schemes offered by them. If you have decided to go for equity release then you must understand the procedure.

How equity release works

Although there are many equity release schemes in the market, all of them are designed on the same basic principle. These schemes lend you a lump sum amount of money against the value of your property. The equity release providers will eventually receive their money by selling the property after you die or move into care.

To qualify for equity release schemes, you have to be above 55 years and own a home which is worth a minimum of £70,000. The property should be of standard construction & any mortgage that is secured on it must be repaid with the equity release or alternative funds. You cannot have both an equity release scheme & mortgage running concurrently.

Therefore, people with little or no mortgage can potentially apply for a lump sum via equity release schemes. An equity release plan involves the lender placing a legal charge on your most expensive asset, so it is recommended to seek the services of an experienced & qualified financial advisor.

By opting for equity release schemes, you can receive a lump sum amount or regular income. This income will help you to live your retired life in a much better way. The money which you will get through equity release schemes is tax free, so you can spend this money in various ways.

If you are planning to go with equity release schemes then research properly, as it involves a big amount of money.

To seek the services & advice from an industry qualified equity release adviser call us on 0800 678 5159 or to find your local adviser by clicking here

With an increasing number of retired people unable to meet their expenses on pension, equity release schemes are becoming one of the best tools to solve this area of need. It allows individuals to unlock the equity that they have built in their home, thereby assisting them meet the shortfalls in their financial affairs.

Equity release schemes allow homeowners to release the equity from their property to generate a tax-free lump sum or regular income. The money generated from equity release can be utilised to pay for home improvements, debt consolidation or to help meet the requirements afforded to a comfortable and luxurious lifestyle after retirement.

Retired persons over 55 years of age and having their own property are the ideal candidates for equity release schemes. With different types of equity release schemes available, you should choose the one that suits your requirements.

Types of equity release schemes

Two different types of equity release schemes are currently available – home reversion schemes and lifetime mortgages. As both schemes offer their own unique advantages, you must choose the best one.

Home reversion – This scheme allows you to live in your property till you die or move into long term care whether that is a retirement home or with relatives. However, you need to sell a part or your complete property to the reversion company. In return, the home reversion company will either offer you regular income or lump sum cash, depending on your requirements. The most popular form of release is the tax free lump sum option.

Lifetime mortgages – With lifetime mortgage equity release schemes, you will always have complete ownership of your property. By opting for a lifetime mortgage scheme, the need for making monthly repayments is completely eliminated. You can even continue to live in your property until you pass away.

If you are looking for a solution to retire without any worry, equity release schemes can be the perfect solution.

To chat to a specialist equity release adviser, contact the equity release team on 0800 678 5159.

Your property is your biggest asset. As the cost of property in the UK is steadily rising again, equity release schemes can help you release some of the equity you have built up in your property.

‘Equity‘ is defined as the difference between the property valuation less any mortgage that is secured on your home.

An equity release scheme is helpful for retired homeowners who live on pensions but are unable to meet their daily expenses. Additionally, people who have adequate incomes may still struggle to pay for life’s little luxuries & equity release can also help here.

If you are a retired pensioner and desire to spend the rest of your life without any type of financial worries, equity release can be a feasible option. An equity release scheme saves you from the worry of any monthly repayments during old age as the loan is only repaid once the property is sold after you pass away or move into care.

Take professional help to ease the complete procedure

Home reversion and lifetime mortgages are the two different equity release schemes you can choose from. As these plans involve many different companies who in turn may have different schemes, you must take professional help to determine the most feasible option to suit your requirements.

When opting for an equity release scheme, you need to consider different factors such as welfare and tax benefits and the inheritance value of your property against the amount you get by releasing the equity. Limits are imposed by the Pensions Service on how much you are allowed to keep in savings before any benefits are affected. Currently you can keep £10,000 in savings before there is any effect on means tested benefits such as pension credit & savings pension credit.

By taking professional help from equity release specialists, you can clear all your doubts about different equity release schemes. Advisers will also make sure that the process goes smoothly without any hassles. If you are looking forward to spend your retirement without any financial worries, equity release could be the best option for you.

You maybe aware of the term equity release? Equity release is becoming more commonplace with people over the age of 55. However, some individuals are still unaware about the features of these particular schemes.

The following are frequently asked questions appertaining to equity release:

1. What is equity release?
It is a mortgage scheme that is designed for the benefit of retired or older citizens. Equity is best described as the value of the home devoid of any outstanding mortgage. With the equity release scheme, you can release some amount of equity which is tied up in your property, in the form of a tax free lump sum.

2. Why should I opt for equity release?
Equity release schemes will provide you with accessible cash. You might receive this as a lump sum amount or in a monthly installment format. People have the freedom of spending their money in any way they want or choose. For instance, you are free to spend the money on holidays or paying off debts. In addition, you have the choice of staying in your home for the rest of your life.

3. Will I require professional advice?
If you have decided to opt for this particular scheme then it is advisable that you get professional advice prior to making major decisions. Contact a professional and skilled advisor who has been in this field for a few years. Such advisors will guide you through the different equity options and make recommendations accordingly. The equity release advisor will also explain the entire process in simple understandable terms.

Consider advice from Equity Release Supermarket to discuss your options on the many different equity release schemes in order to secure your future.

Equity release schemes offer optional loans to homeowners who wish to use their property as a source of income generation after their retirement. It is a type of flexible mortgage that offers tax free cash to homeowners secured against the current market value of their home.

Equity release schemes are available in two formats – home reversion or lifetime mortgage. If you are retired, over 55 years of age and own a property with a good market value, lifetime mortgage equity release scheme could be the ideal option for you.

On the other hand, a home reversion equity release scheme could be attractive for different reasons. It is only appropriate for homeowners above 70 years of age & is the only scheme where you can guarantee a specific inheritance for your beneficiaries. This can be useful if you have a specific attitude that you wish that at least some of your residual estate will pass to someone after your death.

With equity release schemes, you can either get the loan amount as a lump sum or in the form of monthly payment. Equity release schemes are fully regulated mortgages and as such come under the scrutiny of the Financial Services Authority (FSA). This ensures that you have full protection & recourse should inappropriate advice be given.

In addition to the protection offered by the FSA, you also will require the services of an equity release qualified solicitor. Upon processing your equity release application, your solicitor will be required to sign a SHIP (Safe Home Income Plans) certificate. This will confirm that he/she has discussed your requirements & noted that you are happy & fully aware of the equity release scheme & its implications.

What if the value of the property falls?

If the value of your home drops, this will also affect the remaining equity in your property & have the knock on effect of reducing the amount your beneficiaries receive. The final equity release balance will be repaid once the property is sold after the homeowner passes away or moves into care. Nevertheless, you do have the assurance of the ‘no negative equity guarantee‘. This ensures that at final repayment, should the equity release balance be higher than that of the property value, the lender will receive no more than the property value.

All equity release companies have to provide a Key Facts Illustration (quote) to confirm the set up & associated costs including surveyor charges, legal charges, application fees and redemption charges. This document should always be discussed with a qualified equity release adviser who can explain the features & benefits of the scheme.

There are numerous financial solutions in the marketplace that are available today. While most financial products often include making repayments to lenders, there is one solution to which this does not apply.

Equity release schemes are one kind of financial instrument where homeowners can release equity from their properties to live more comfortably. However, these schemes are only applicable to those over 55 years of age & with a property that is valued above £60,000. Equity release schemes are therefore ideal for those who are asset rich but maybe income poor.

Here are some of the benefits that these schemes offer: –

Equity release schemes do not include any monthly payments

All SHIP regulated schemes have the no negative equity guarantee which ensures that you can never owe more than the worth of the property

Homeowners can continue to live in the property for the rest of their lives

Debt on equity release schemes is repaid only when the property is sold which is either when they move into long term care or pass away.

These schemes can either give you a lump sum or monthly payment based on the preferences of homeowners. It is important to understand that the amount gained from equity release schemes will depend on the property & the age of the owners.

Another aspect of equity release availability is the condition of the property. It is for this reason that homeowners are encouraged to keep their property in good condition so an optimal value can be realised.